Immediate effects of a dollar collapse

Ok, for months now I have been reading and hearing a lot about a massive financial collapse heading our way.
Sources are the likes of Gerald Celente, Lyndon LaRouche, Ron Paul, Peter Schiff etc.. And of course from members of ATS and discussions.

I have been thinking about this a lot, and searching and researching what the immediate repercussions of a dollar collapse would look like? I can't
quite seem to find enough information to help paint a pretty good picture of what to expect.

So hypothetically I awaken tomorrow morning for work, make a coffee, turn on the TV and the news is on, breaking news of a total financial meltdown,
the dollar has collapsed.. Is this how it will come about? Will it be a breaking news story dominating the news? Will it or could it happen over
night? Or is a dollar collapse not quite happening and does it need a false-flag attack to give it a bit of a kick start?

I'm curious on what would happen within the first few hours of the breaking news. Would I look out the window and expect to see mass looting and
panic? Would it make any sense to go to work that morning, take the kids to school (not that I have any) or should I be packing the car up with as
much food and water as I can and make a break for my folks house in the country?

Currency has always carried a plethora of germs. With the "flu" outbreak no one will want to handle currency. So that will necessitate a change in
currency exchange and will help to mask the economic collapse.

Everything will soon be done via scan where no one has to touch a possible source of flu germs.

However it happens, people will be made to believe it is a good, sensible, practical idea.

The first indication you would get from a dollar collapse is prices of foreign stuff skyrocketing. As long as you are in the States that won't be too
big a problem. Most money moves around within the nations borders. So the internal market (US produced goods) could zombie on for weeks or even months
before prices get out of hand.

I guess the biggest problems loom for the people that are paid in dollars outside of the US. The troops that are stationed abroad will notice that
their money is next to worthless outside the base. Airlines can't pay for fuel for the return trip in dollars.

So basically the US will become a financial island for a while.

The thing I don't understand is why people (here on ATS) think the dollar will be replaced by the Amero? It's not as if changing the name of the
currency will restore trust in the US financial system.

US dollar collapse, means anything imported from overseas will cost a LOT more, the main immediate effects will be on gasoline prices, but other
things you buy will also go up hugely in price if they are made in another country.

It would have no real effect on American produced goods.
That will lead to a depression, and some really tough times ahead .

A US banking collapse is something very different.

That means many people will lose their savings, jobs, and it will result in a complete social upheaval, including bank runs, riots, looting, and
martial law.

In peaceful law abiding countries like Japan and Australia, people will help each other and wait patiently in long lines for food and other
necessities.

In America, people will just freak out and use guns and deadly force to take whatever they want away from others. Survival of the most heavily armed
and desperate.

Originally posted by CanadianDream420
it won't occur as breaking news on tv....
well, not in the aspect you have placed it in.

more or less big talk over a month er so, with dow and such dropping 2000 points every few days and the price of oil/gold, same thing?, skyrockets x4
fold.

5000$ an oz for gold and 250 a barrel for oil$...
is it that unrealistic?

then the price of bread goes to 5$ a loaf and milk 10 a gallon.

have a nice day!

I agree - this seems to be the trend. For a while I suspected they would do a sudden devaluation of the dollar - but now I doubt it.

It has lost around 15% of its value - the optimists are trying to sell the story that it means investors confidence is increasing, so they are less
risk averse and therefore moving out of dollars.

I would say that is a crock. Investors may be moving into markets etc - but they are doing so because those markets are simply defying gravity - and
its going on and on - they won't collapse like they should, and every day your money is idle is money your losing - because in 6 months the dollar
has shed 15% of its value - thats a 30% annualized rate. So if your sitting on dollars - your making a nice loss.

So investors are going back in to trade - knowing that its a dangerous and risky play anyway - but not willing to sit on a dying currency.

The other side of the current devaluation of the dollar is due to diversification by forex holders - they are moving into other currencies.

Something that is amusing and ironic is the Fed itself buying SDR's - ie. the Fed itself is diversifying away from dollars, while at the same time
mouthing empty platitudes about the long term strength of the currency.

The rate of devaluation of the dollar may accelerate at some stage - as people run for the gate.

There is an event coming soon, which will rally the dollar. That is the stock market crash.

When the market crashes - the dollar will rally - when it does there is an indicator that you can put right alongside the dollar, and measure its long
term health, and that is of course the price of gold.

If gold falls faster than the dollar rises - then the dollar has a little long term health left, if gold fades at the same rate the dollar rises, this
indicates poor faith in the dollar, if gold holds steady against a rising dollar - you know the end of the dollar is near - if gold and the dollar
both rally at the same time - then you could chisel on the dollars tombstone "Gold Triumphed."

So what should you expect from the financial disaster?

You won't wake up in the morning to disaster - it will be a gradual but accelerating onset.

All kinds of large businesses closing - any kind of service or non essential industry is going to struggle. Even places like gasoline stations may
close.

Only the best of the essentials will survive for the long term. Food, clothing, transport etc.

Prices will go up - unemployment will go up - salaries will go down - stocks of goods will be depleted. The government may cut back on maintenance of
essential services - water, electricity etc may be under threat in the longer term.

Prices of some luxury goods may come down - along with assets - the prices of essential items will continue to go up - some items you normally buy
might disappear completely.

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A banking collapse seems unlikely - I think the govt will just continue to throw money at them - its a blackhole - but as long as they are determined
to keep them afloat they can just pretend the debt isnt there.

Globally banks hold around $1.4 quadrillion worth of 'toxic assets'. The value of those assets is debatable - the best guess is somewhere close to
zero, or possibly much less.

That is I think around 50 times to entire GDP of the planet (thats the figure I've heard a couple of times) - so there is plenty of bang from the
bucks - enough to nuke the entire banking system.

If there was a banking collapse - then it would stop everything. All business inside and trading outside of the US would have to stop - because
no-one would have any credit.

Its possible - but I think the govt will just push all the assets into one or two banks - then explode them - and use the clean banks to carry on
with.

Then again - I could be wrong .. in which case - everything would close, and everything would stop.

The following is my opinion as a member participating in this discussion.

I agree with the posters who have mentioned the two types of collapse that could occur: stock market and banking. Here's what I would expect:

Stock collapse: You would have some warning, but it wouldn't help much. Current NYSE rules state that the market closes if and when the Dow falls to
a certain percentage of previous value. This, the market cannot 'crash' as it did in 1929. Instead of a sudden crash where all stock basically
became worthless overnight, stocks would drop the maximum each day until they finally stabilized at mere pennies on the dollar (or possibly at
nothing). The only safety net this actually provides for is that there are a few days for the government (or the banks) to make some sort of move to
sooth investors' nerves.

The stock market is driven by investors' confidence that their investment is going to produce a profit. That profit can come in two ways: either by
dividends paid from company profits or by capital gains (meaning the stock is more valuable to investors than when it was bought). Thanks to the
Federal Reserve (neither Federal nor a 'reserve'

), the dollar as well is only worth what people think it is worth. If a year ago, you could
buy a loaf of bread for 50 cents, and now you need $1.00 to buy that same loaf of bread, your dollars are worth half as much as they were, relative to
the price of bread. Without some form of global currency to back them up (like gold), there is no bottom to a potential fall in the value of the
dollar.

I mention the dollar's failure to be tied to a gold standard to point out one additional contributing cause: the dollar has been backed by a
commodity until recently... oil. As long as oil was tied to the dollar, the dollar was kept afloat in troubled times. recently, several
oil-rich contries (Iraq under Saddam Hussein, Iran, Venusuala to name a few) have either depegged from the dollar in favor of other currencies (the
Euro is popular form what I hear) or are seriously considering depegging from the dollar. That was the reason for the Middle Eastern wars. But
back to the explanation...

Now, assuming that the stock market does not recover from a controlled collapse, the problem will be that suddenly prices escalate out of control.
Foreign goods would be affected first, as foreign companies will not be as willing to accept dollars; they will demand more of them for the same
goods. Domestic prices might actually decline as people became unable to purchase goods, but this temporary decline would coincide with massive
unemployment as businesses no longer were able to obtain the credit they rely on to cover daily operating expenses. It is completely possible to see
unemployment rates as high as 75-80% IMO. The two symptoms (temporary deflation and unemployment) would lock into a vicious spiral until the supply of
common goods was exhausted, at which point any temporarty deflation would turn to hyperinflation:

The businesses that did survive would be smaller ones which have not overleveraged their credit and could afford to stay in business past the initial
collapse. They would not, however, be able to keep up with demand, and many goods, especially food, clothing, etc. would become rare. The rarer an
item is, the more some people will pay for it, and this equation would drive domestic prices up as well. Expect to hear a tremendous amount of news
about 'price gouging', as retailers try desperately to keep up with inflationary affects.

The combination of hyper-inflation and extreme unemployment will be the cause of the real SHTF problem. People who are starving will do anything -
anything - for food... steal, rob, loot, destroy, kill... and some will do the same for even non-essentials. There are a whole lot more people
than there are police, and any honest cop will tell you (in private) that a full-blown riot is one of their biggest fears. When this happens, expect a
complete breakdown in social services, especially the ones we rely on the most.

Banking Failure: This will likely occur in response to the above mentioned situation. people who lose their jobs will be the most likely (IMO) cause
for a banking run. With no more money coming in from their paychecks, many will begin to dig into their savings to survive, and it is likely in
today's social climate that those who have savings will attempt to maintain their standard of living while those savings exist. Hyperinflation will
produce a greater drain on those savings as well, making them last for a shorter time.

All this means that individual banks (the branches you and I go to) will begin to have less money on hand for withdrawals. Eventually, they will
run out. It is human nature that once this happens, every other depositor will panic and try desperately to get their money out. This is what
caused the banking collapse in 1929, and is the very reason the FDIC was put into place: to stop as much panic as possible by guaranteeing depositors
they will at least get some of their money back.

But the FDIC does have limits. The depth of the Federal pockets is not inffinite (despite what Congress would have us believe). Some of the initial
closures will be backed up by Federal funds, but ironically, the longer your bank holds up, the less chance there will be anything left to guarantee
your deposits. The corporate executives will have long went into hiding by the time this happens. And you wondered why the massive banking bailouts?
That is simple: they were a nest egg for the collapse the banks know is coming.

Once banks begin having to close their doors, locking away peoples savings behind them, the real fun begins. In a panic situation, people will commit
suicide, go on rampages, riot, and in general turn into animals. The real problem will be in metropolitan areas, although suburbs as well will be
affected. Eventually, some of this hysteria will even spread into rural areas, although traditionally these are areas better known for their ability
to survive without assistance.

I would estimate a week to 10 days for a complete stock market collapse. I would then estimate another week at most before the run on banks would
start. Perhaps a month later there would be precious few banks open and the FDIC would be broke. Problems would start as soon as unemployment reaches
about 50% (IMO). They would peak as the banks began to close in wholesale fashion and the FDIC began having trouble paying its claims, perhaps a week
or two later. Martial law would have to be declared during this time, and still I do not believe the violence will subside for several months at
least.

What will be left is a non-existent economy, reminiscent of the 1930s. The population will be decimated, and disposal of remains of the victims of
crime and police action will be a major concern. Few stores will be open, and they will be understocked and terribly suspoicious of customers. I can
imagine easily conditions where one must be recognized in order to be able to shop. The shelves will be mostly empty, especially of those items that
were in demand. New shipments will be sporatic and irregular. Prices will be whatever the shopkeeper wishes to charge; people who have the money will
pay it. Those who don't have the money... won't eat.

When this will happen is another story. I really don't know. We are in uncharted territory, what with the regulations on banking and the stock
market. I do know this: I said for many years that the stock market was way too high and should have leveled off at around 7500-8000. Ironically, that
is where it bottomed after the latest correction scare. Now it is back above 10,000 (last time I looked), and IMO it should now be around 6500-7000
maximum. We are due for another correction. Each time a correction starts, there is a chance that it will become a free-fall due to a sudden scare
among investors. The greater the fall, the greater the chance for this. That means that the higher the market goes now, the more chance that the next
correction will be a prolonged version of 1929.

That's the scenario I see happening. Sorry it's not that pretty.

TheRedneck

As an ATS Staff Member, I will not moderate in threads such as this where I have participated as a member.

Nobody can see into the future. We don't know what the future holds, we can only guess. Luckily, new information is available at the speed of light.
So if you stay on top of things (and know what you're doing) you can dodge the hammer before it slams down on the rest of us.

But as far as predicting the future goes, predicting something like a dollar crash (months ahead of time, no less) is a pipe dream.

At the start of each quarter, the NYSE sets three circuit breaker levels at levels of 10%, 20%, and 30% of the average closing price of the Dow
Jones Industrial Average for the month preceding the start of the quarter, rounded to the nearest 50-point interval. As of the first quarter of 2009,
these levels are 850 points, 1,700 points, and 2,600 points respectively. Depending on the point drop that happens and the time of day when it
happens, different actions occur automatically:

Originally posted by keepureye2thesky
I think the dollar already collapsed....
More was printed, problem solved.....

I'd almost agree.

But I think the dollar did collapse, and more was printed to delay the effects of it.

Personally, I think we're all way behind on this. This entire system already collapsed before we knew there was a problem. We breached the threshold
of stability before the first bank failed. Now we're just playing catch-up, and our governments are trying to analyse where the next landmine is, and
these are the same people who never saw the largest and first problem to begin with!

As others have said, I think this will show in the financial markets first. It could happen at any time for various reasons. All that's needed is an
event; a terrorist attack or financial assault by another nation. If anything causes panic in the markets, they could completely collapse within
hours.

News of that would slowly spread out, and banks would see a run.

Our governments would already be aware the moment the markets collapse and would order a state of emergency.

It really would be like a disaster movie.

Unfortunately, however scary it seems, I do absolutely think it is needed. It will take a massive shock like that to wake people up to the reality of
what we have built in this global system.
It will take a collapse of this nature to force people to change, and demand the required change from their government.

Some of you lack real knowledge of the stock market, so I thought I'd chime in. A decline in the dollar tends to actually send the stock market up.
If you don't believe it, look at the charts, it's eerie how close the correspond, dollar down market up, dollar up, market down!

Many people in cash that are getting eaten up by inflation that can't put their money in CDs or money market accounts because the rates are
unbelievable too low, move to stocks.

U.S. companies also benefit because suddenly foreigners are interested in buying cheaper American products with their more highly valued currency.
You'll often hear of people doing this to Mexico, they'll go into Mexico to buy cheaper goods. Or Canadians will cross into the U.S. to buy cheaper
goods when thier currency is worth more. Some will go online and buy American when they can get more for their money. U.S. companies located
internationally are also boosting sales as people buy products with their more valuable currency.

So there is basically a trade shift. A trade shift from cash to equities and a trade shift from exporting less to exporting more.

Some countries are even afraid of a devalued dollar because it could lead to more jobs going to the U.S. and trade imbalances. Even recently France
said that something needed to be done about the rising Euro! Yes they are all scrambling to devalue their currencies too. Think about it, why would
you open up a manufacturing plant in Europe when you could open one up in America and save money in the exchange rate in manufacturing and labor
costs. Even if it was a fractional savings, it might be a dealmaker. This is why companies are in China. This is also why the Chinese have PEGGED
their currency against ours. To avoid our currency becoming cheaper than theirs and losing manufacturing jobs back to America. Just my take on it.

They are scrambling to print and dump more currency out also to fight off another Great Depression. It's been said that the reason the last Great
Depression lasted as long as it did was because the US didn't spend as much fast enough. This is an economic policy and theory. Is it working? It
worked during the Great Depression. Or so people say, time heals wounds though as well.

The key to saving the dollar collapse is to start raising interest rates, the problem with that is banks have bad debts that are tied to interest
rates so they are trying to buy time so the banks can work all that out. Many of the financial institutions are bankrupt, but have gotten around it
with changes in the accounting rules that allow them to carry toxic assets for longer before doing a mark to market adjustment.

In relation to the dollar, the collapse has been going on for a long time now.

However let's do a reality check here for a minute. What defines the dollars collapse? Is it's value in comparision to the EURO and other world
currencies? Or is it inflation and spending power domestically? Suddenly when you see something that use to sell for $2 going for $4? Sounds like
what we've already seen with milk prices! So they say the next leg is commodity prices skyrocketing. The price of sugar, wheat, oil, etc. Pay
attention to that next!

There is no need for guess work here. Several countries have had central bank or currency collapse in recent memory.

If you look at Iceland right now or talk to adults who were in Bulgaria or Brazil or Russia when their currencies collapsed you can get an idea.

Russia is a closer scenario because of its size and influence. The US having such a plethora of tentacles makes things worse globally. For instance
Iceland's troubles haven't effected us much. Except perhaps in their owning some of our credit default swaps and making the unravelling even harder
for short sales. But other wise, we still have food on the table if we're lucky. If we're not, we're most likely not blaming Iceland.

If there is a global collapse the US will not be so lucky as to be incognito. Everyone will blame the US for their discomfort. That could be
unfortunate.

But truly, keep some cash on hand and have a couple of stuffed cupboards that you use but keep stocked. People are resilient and resourceful and the
money is pretend so after the initial shock things will start to move again. Unlike in a natural disaster, this shouldn't cause pain or starvation
if you are suitably prepared.

I have heard having a stash of cigarettes, coffee, tobacco or booz or other such things - things that keep and aren't that bulky or heavy - can be
used for trade and will be in demand. Having gold is wise but we don't really know how practical in day to day life, yet.

A black market appearance I would wager is almost guaranteed. So whatever you have to trade for milk and gas etc. is going to be useful.

I suggest researching:

life for locals in the 3 weeks following the Chinese earthquake re black market

life for locals in the 3 days following Katrina re value of networking

life for locals in Iceland now and for the past few months re modern elite depression

It can't hurt to have a plan. I wouldn't say that I am organized enough to be a "survivalist" like many on ATS. But over the years and thanks to
many threads here, I do have enough to keep me calm when I read this stuff.

One thing I think isn't mentioned enough is connections.

Get to know people from all walks of life around you. Rich people and homeless people and migrant people and 3rd generation locals. Moms and
singles. Mechanics and handymen and techies and historians. These friends will all have different views and supplies and assistance and tools and
needs. Be there for them now when you can and learn from them if they're willing to teach you. Don't expect to just meet and need in a crisis.

If this all comes down, look at it like a computer game and start the game now, collecting in your back pack all the things you'll need when you get
to the last level and meet the big monster.

But life isn't a game. So don't do more the 5% on this as it may never happen. Don't spend more than 5% and diversify only 5% into end of days
investments. Don't obsess more than 5% of your time on it. It will be enough - but everything in moderation (including moderation - when the time
comes).

Its not a question of "if" the US dollar will collapse, its only a question of "when" and how rapid or gradual the collapse will be.

The dollar is already collapsing. It has lost 30% of its value since 2000.

The global consensus, discussed at the recent G20 meeting, is that the dollar must be replaced as the global unit of currency exchange. Many nations
are already forming bi-lateral agreements to conduct trade in their local currencies, rather than the US dollar, and there is a concerted move to
develop global aternatives to the dollar.

The result of this is that the dollar is losing its charm, and is less desirable in foreign markets. While it is true that when the dollar declines,
the stock market tends to go up, that is like shuffling cards....there is no real wealth creation as a result.

History has shown us that all fiat paper currencies ultimately collapse, especially when governments engage in printing money to support their
financial obligations...which the US government is now doing in spades.

No one (in their right mind) wants the dollar to collapse precipitously, because it would wreak untold havok in the world economy, and have serious
repercussions domestically. So the US dollar has been propped up, and more and more dollars pumped into the system, to maintain the status quo.

The result is a "dollar bubble", which like all bubbles will pop, when the threshold of confidence is finally breached. Then there will be a mad
rush to divest dollars and dollar denominated assets on the global markets, just like there is a mad rush to divest stocks when a stock market bubble
pops.

When this occurs, the Central Banks will be powerless to stop it, and we will have a real economic disaster on our hands. IMO the anticipation of this
event is the real reason Obama recently declared a National Emergency, which has only been officially declared six times in US history.

Although no one can predict when a bubble will actually pop, the signs suggest that the dollar bubble will pop sooner rather than later. Hold onto
your hats, we are in for a rocky ride.

However, citing examples of other countries who have gone through a currency collapse is not exactly appropo, because their currencies were not the
global units of currency exchange. The current dollar bubble is much, much larger than any other currency bubble in history. It has been inflated by
trillions of dollars over the course of just the last 12 months.

The devastating results of a bubble collapse are directly proportional to the size the bubble before the collapse. Hence, the precipitious collapse of
the US dollar has the potential to be your worst nightmare.

But this is no dream. The Titanic of the US economy is about to hit a real iceberg, which is largely hidden from view for most of the US public.

We all have those relatives, the ones who are just soooooo sure of themselves and their bloated ways of living.

You try to reel them into the conversation, not to scare or intimidate, but to inform and discuss and allow them to see, the big house, that comes
with a big mortgage, the nice cars, that come with a big lease, they wake simply to go slave for someone elses gain, sure they get paid with alot of
paper money, but we all know how worthless that is.

They see us working in our gardens, and building our own furniture, heating our water that we catch for free from God's sky, with dry dead trees that
God also supplied to us to burn or use how we need, and they say we are out of touch with reality.

I say to them at that point...Ok....you're right...I am wrong...

and when the time comes, their cars and homes are taken back, their money worthless, they cant buy food because they don't have anything of worth.
Who will they run to? Those who have food shelter and warmth.

Money doesn't buy anything, it just tricks someone into giving it to you.

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